Kotse O Bahay/Lupa: Which One Should Be Your First Big Purchase?

Kotse O Bahay/Lupa: Which One Should Be Your First Big Purchase?
Image by @xb100 / Freepik

If you have been working for years and are able to save a chunk of money for personal investments, you might be having that itch to take things to the next level, a.k.a making your first “big” purchase. However, it is crucial to identify the pros and cons of every big purchase to ensure that your hard-earned money does not go to waste. Here, two professionals share what their first “adulting” purchases are, as well as the things they considered before buying them. 

What should you buy first, a car or a house?

Jolo, a 29-year-old Project Manager, has been working for almost a decade. He purchased a car on his 6th year of working full-time, and while his purchase was definitely useful, he admits that it had some cons too.

“My first big purchase was a car because it gave me a sense of independence,” says Jolo. “I was 26 then and earning a stable income. Ang naisip ko lang ‘nun ay ‘deserve ko naman to!’”

Jolo says that his first car served him well. He took it to work every single day for years, and to family trips. However, the increasing maintenance and registration fees can be heavy on a young professional’s paycheck.

“On top of the fees, nagde-depreciate pa ang value ng kotse. So this is something that I wish I took into consideration when I was younger,” he admits.

As for 32-year-old IT Specialist Grace, she opted to purchase a land for her dream home. “Simula bata pa lang ako, nagre-renta lang kami ng buong pamilya ko,” she shares. “I promised myself that when I save up enough money, I’m going to buy a home for my family.”

After years of working, Grace purchased a modest-sized lot in their province as she believes that it is a form of investment. “For me, property talaga ang sa tingin kong mas magandang first big purchase. Tumataas kasi ang value ng real estate. Kapag hindi mo naman kailangan tirhan, pwede mo siya gawing source of income.”

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Things to consider before making your first “adulting” purchase

To ensure that you are getting the best value for your money, ask yourself these important questions before your first big purchase:

Can you afford it?

It’s important to assess if purchasing this particular item will negatively affect our financial situation. “Determine if you prefer paying through installments, and slowly integrate it into your monthly budget. May matitira pa ba sa ‘yo kapag ibinawas mo ‘to sa sweldo mo?” Grace says.

Do you really need it?

This might sound cliché, but we often forget to ask ourselves this crucial question. “You can determine whether you really need this item or it’s just luxury,” says Grace. “Assess if you really need it. And if you do, ask yourself din if you need it right now.”

How will it benefit your daily life?

“When I purchased my first car, I knew no doubt that it would benefit my daily life,” Jolo shares. He used the car every single day to get to and from work, and it was also beneficial for the whole family when running errands and going on holiday vacations.

“If you’re purchasing a house, tingnan niyo kung titirhan niyo ba ito, o baka pwede niyong pa-rentahan,” he adds. If you are going to be spending a big chunk of your hard-earned money, isn’t it best if it’s on something you can use every day?

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Is it a wise investment?

Jolo admits that if he could go back to his younger years, he would have chosen to purchase a real estate property instead of a car. “Kahit nagagamit ko ‘yung kotse, hindi ko masabi na good investment ito for me,” he says.

A car depreciates in value annually, which means that if you do choose to sell it after a few years, its selling price would be much lower than when you bought it. “It’s an asset and not an investment. I can sell it for a good amount of money during emergencies, but that amount is lower than how much I bought it a few years back,” Jolo shares.

Will it still be a good idea 10 years from now?

Can this purchase stand the test of time? Can it be passed onto your children and future generations? This may not be a requirement for all big purchases, especially if you have more than enough money to spend on a bit of luxury. However, if you are a young professional, you have to be extra wise with your money.

“I bought a land so I can build our family home. I also know that it will still be there until I grow old and have children of my own,” says Grace.

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